Taiwan to start oil exploration in South China Sea. A move guaranteed to peeve the states in the area for no real gain for Taiwan. Phils vs Taiwan, this time. The Ma gov't policy of using the Senkakus to unsettle relations with Japan and the US and the South China Sea to unsettle relations with its southern neighbors continues unabated. The whole point of this policy is to isolate Taiwan from possible supporters, as stealthily as possible. Phils paper on the South China Sea oil mess.

As I have noted extensively on this blog, innumerable documents produced by the PRC and ROC prior to 1971 stated that the Senkakus belonged to Japan. A 1950 official diplomatic document from Beijing also states this, according to the Japan Times.

Taiwan's legislature totally embarrassed itself by asking about envoy to the US King Pu-tsun's sexual orientation. The KMT legislator's raising of the issue appeared to be a simpleminded trick to subvert the process and derail the discussion, which worked perfectly.

_______________________[Taiwan] Don't miss the comments below! And check out my blog and its sidebars for events, links to previous posts and picture posts, and scores of links to other Taiwan blogs and forums! Delenda est, baby.

My friend Michael Cannon recently purchased a recumbent bike due to recurring back pain and other issues. We rode from Taichung to Kaohsiung for two days this weekend, down the 3 and then to the 1. Michael got lots of attention from passers-by (Michael's post is here). The ride was nice in good weather on Saturday, a wonderful and easy 120 kms for me, but Sunday's ride from Chiayi started in pouring rain and cold and blasting winds, and ended in the cold and Kaohsiung traffic, on Rte 1. Still, it was lots of fun watching people honk and yell at Michael, and video, photo, and stop him to chat.

People stopped next to him and insisted on taking pictures. Here a woman has him pose with her baby.

It's sometimes hard to believe that he doesn't fall over. Does he have a flywheel hidden in there somewhere?_______________________[Taiwan] Don't miss the comments below! And check out my blog and its sidebars for events, links to previous posts and picture posts, and scores of links to other Taiwan blogs and forums! Delenda est, baby.

Wednesday, December 26, 2012

The Cross-Straits Economic Cooperation Framework Agreement (ECFA) is paying handsome dividends for Taiwan, spurring significant tariff savings and business growth, according to the ROC Ministry of Economic Affairs Dec. 22.

The article goes on to give "details" about the great economic growth under the ECFA Cargo Cult regime. But first I thought I drag out overall numbers so we could get a feel for ECFA's effect on the exports to China. Here are the numbers for 2004-11 for value of exports to China in million$ (DGBAS):

Assuming we get $8,000 million for Nov and Dec, that would put 2012 at $83 or $84 billion. Roughly the same as last year. Of course, the global economy is in a nasty sustained downturn thanks to the austerity insanity in Europe and the total indifference of American elites to the fate of the US economy and the individuals who inhabit it, so we shouldn't be expecting too much anyway. But let's graph these numbers so we can view the trend line:

I had Excel put in the trend line on this quick-n-dirty chart. It's obvious even to the Mark I eyeball that the numbers for 2010 and 2011 and 2012 lie on the trend line (in fact slightly below where we would have been had the trend for 2004-07 continued). If ECFA were really that awesome what we should see is a spike after 2010, with the years 2005-2008 lying clearly below this simpleminded trend line. BUT: Remember that (1) in 2009 the economy collapsed and it was still recovering in 2010 and (2) numbers like this tend to level off and become stable over time. What stands out, really, is how deeply the Great Recession scored the global economy. It's a relief to know that the Obama Administration jailed all the bankers and instituted a tough new regulatory regime like any sane and competent government would do, isn't it? O wait....

Anyway, the Taiwan Today piece gave some more breathless numbers:

The latest MOEA statistics show that from January 2011 to October this year, the ECFA generated US$551 million in tariff savings for local firms and farmers.

Jan 2011 through Oct 2012, tariff savings of $US 551 million on a hair over $150 billion in exports to China. That means that the total savings are roughly 1/300 of the export total. How big can the effect be? After all, shifts in the value of currency, labor costs, or inflation are much greater...

In case you were wondering about the trend for 2012 through November, exports to China are down 5.5%, to ASEAN 6 up 9.3%, and to America down 10%. Yay ECFA!

We then get some numbers in percentages....

For the first 11 months, agricultural exports to mainland China were US$146 million, up 36.47 percent year on year. Oranges, live groupers and tea leaves top the list at 103.76 percent, 32.22 percent and 11.89 percent, respectively.

The wording is strange. I think the author meant to say that the exports to China were UP $146 million. Otherwise, the second sentence makes no sense as written. Indeed, the DGBAS numbers have ag exports to China at $630 million through Oct of this year for a y-o-y rise of 17%, well more than $146 million. Because of the way this was worded last year, I suspect that this wording is actually meant to apply to the early harvest agricultural goodies and not to ag exports as a whole.

I've blogged on this issue several times. Let's just repeat what I wrote last year at this time because it is still apropo:

The COA then goes on to make my bullshit sensor signal a five alarm fire:

In the Jan.-Oct. period, Taiwan farm produce exports to China, in 18 categories that were included on an ECFA early harvest list, totaled 14,242 tons at a value of US$95.7 million, according to Chang.

Ok, in the 18 ag product categories, there was a total gain of US$95.7 million. Now hold still, because a couple of paragraphs later come some numbers.

In the 18 categories, the sale of live groupers surged by a whopping 192 percent year-on-year to an export value of US$79.66 million, she said. Chang attributed the increase mainly to the ECFA “early harvest” tariff concession program and the opening of 15 Chinese seaports for direct shipping links.

So... maybe I am reading this wrong, but of the $95.7 million increase, $79.66 million is groupers. 83% of the increase is from one product! Add the number given by the spokesperson for tea exports, $7.37 million, and 90% of the gain is from just two products. We're not succeeding in agricultural products, just in raising fish. Subtract that $79.66 million and the agricultural deficit sucks -- which shows how important definitions of what counts as agriculture are -- most people when they hear the word "agriculture" don't think of fish.

The numbers are basically in the same proportions, just larger. Grouper and tea still account for the bulk of the rise in exports to China. The 103% rise for oranges is probably from a very small base, no doubt why percentages and not absolute numbers are given. The comforting idea that ECFA is going to save the poor farmers of southern Taiwan is a con. Unless you raise grouper -- fish and related products account for 2/3 of the island's agricultural exports (data source) -- you are not making money off agricultural trade. That post I wrote last year also explains why the profits are not going to Taiwan.

Taiwan runs an agricultural trade deficit with China proper but when you throw in Hong Kong, counted separately in the Taiwan figures, it seems that Taiwan still runs a slight ag trade surplus. Japan, China, and Hong Kong are first, second, and third as agricultural trade destinations (DGBAS). Against that, there's likely a flood of smuggled agricultural goods from China not counted in the trade figures (see this article).

Despite the hype, agricultural exports to China are not flying out of the containers. Rather, they consist of a couple of high value items whose profits are concentrated in a few powerful hands. This is why China cannot woo the south with the promise of agricultural concessions. Because they have no appeal for the vast majority of farmers._______________________[Taiwan] Don't miss the comments below! And check out my blog and its sidebars for events, links to previous posts and picture posts, and scores of links to other Taiwan blogs and forums! Delenda est, baby.

On the heels of the defeat for the environment by the Miramar Hotel, the government is announcing a feasibility study for a highway between Hualien and Taitung to cut the travel time for the 180 km route by one hour. Lots of people passing this around on social networks, accompanied by expressions of disgust and dismay. It's obviously not for "local residents" (Taitung's population is declining over time and note below comments on highway use), but for the anticipated big busloads of Chinese tourists whose presence is an excuse for spraying ever more concrete around Taiwan's most beautiful areas as well as to better enable gravel and other firms to strip the area of its resources. Highway construction will also enable the KMT to feed and water its patronage networks on the East Coast. The TT writes:

Minister of Transportation and Communications Mao Chi-kuo (毛治國) yesterday said the ministry intended to budget NT$15 million (US$484,000) next year to conduct an assessment on building an expressway connecting Hualien and Taitung.

The government is electrifying the rail line between Hualien and Taitung, something discussed for years. The highway bureau also observed:

DGH Director General Wu Meng-feng (吳盟分) said highways 9 and 11 are the two main roads connecting Hualien and Taitung, and the travel time is between three and four hours.

He said that traffic on a normal weekday only usually accounts for about 20 percent of the highway’s designed capacity.

Yes, that's right. The government is talking about putting in four lanes of tarmac to replace two lanes that operate at only 20 percent of capacity outside Lunar New Year and a few other times. Just another example of my friend Jeff's pithy comment on Taiwan's construction-industrial state: "There's no place in Taiwan so beautiful it doesn't need more concrete."

Mess Halls from the days when US servicemen and their families were posted here. Don't miss the post below with pics of the Grand Hotel from a half-century ago.

Government moves forward on "free economic zones." These will be full service areas which will have special regulations for environment, land acquisition, labor, etc. Labor: once again the government is going to push to get more "foreign labor" in, reduce the minimum wage, and float suggestions that Taiwan import Chinese workers.

_______________________[Taiwan] Don't miss the comments below! And check out my blog and its sidebars for events, links to previous posts and picture posts, and scores of links to other Taiwan blogs and forums! Delenda est, baby.

Monday, December 24, 2012

Longtime resident and government regulations boffin Peter Whittle has a long article explaining a fairer path to citizenship for local long-term expats and giving excellent background on the issue at Taiwanease.com. The article addresses an outrageous unfairness in Taiwan citizenship rules: if you immigrate to Taiwan, you must give up your original citizenship, but if you are born here, you can hold two passports, no problem. A taste:

Ms. Hsiao was prompted to raise the proposal on behalf of two Pakistani men, long-term residents of Taiwan with Taiwanese wives, who had applied for ROC citizenship, met all of the qualifying requirements, been issued with candidature certificates, and then duly proceeded to renounce their original citizenship. Having completed the renunciation, they were informed by the Ministry of the Interior (MOI) that their applications had been rejected due to disqualifying factors that, through no fault of the applicants, had not been revealed during the initial phase of their application. This left the two applicants in the terrible plight of being stateless, unable to regain their original citizenship, while denied new citizenship here. In this situation, they were unable to travel outside Taiwan, unable even to visit a terminally ill mother in Pakistan, and with no way of resolving this difficulty at any time in the foreseeable future.....

.... read the whole thing; Whittle's discussion of the MOI's reasons for not revising the rule shows once again how silly prejudices dominate the MOI view._______________________[Taiwan] Don't miss the comments below! And check out my blog and its sidebars for events, links to previous posts and picture posts, and scores of links to other Taiwan blogs and forums! Delenda est, baby.

The controversial construction of Miramar Resort Village at Taitung County’s Shanyuan Bay (杉原灣) gained conditional approval from a seventh Environmental Impact Assessment (EIA) meeting yesterday, despite heated debate over the legitimacy of the project and the EIA meeting.

According to the Taipei Times, the project was created to get around the environmental impact assessment (EIA) process by making the initial building site less than one hectare in size. It was then expanded. Several years ago I heard longtime environmental activist Robin Winkler speak on EIAs in Taiwan:

Another problematic structural feature of the process is that the corporations themselves hire the outside consultants who perform the EIA -- meaning that it will probably reflect the concerns of the corporation. Further, the way the law is written, the EIA applies to projects of certain sizes -- meaning that it can be skirted simply by breaking the project up into small pieces and labeling each a separate project (fans of tax evasion in Taiwan will see an eerie echo of the subcontracting system).

The county government piously fined the construction company $300,000 NT for exceeding the 0.9 hectare land limit for the project a few years ago; activists have long accused the county government of being in collusion with the land developer. According to that Taiwan News report, the beach is rented for just $125,000 NT.

The "conditional pass" is also a feature of regulatory inaction in Taiwan; the conditions are given lip service and the construction (or media merger, in the WantWant purchase of Next Media) goes forward. As Winkler pointed out in the seminar I summarized above, no project has ever been killed by a failed environmental assessment. In fact the EPA has intervened on behalf of polluters to allow them to pollute. For example, see this post where, similar to the Miramar case, a judge apparently killed a project only to find that reports of its funeral were premature.

So what is it that has people so up and against the Miramar resort? Let’s start with its blatant disregard for the law. It all started in 2004 when the Taitung County government signed a BOT (build operate transfer) contract with the Miramar Group, a multi million dollar corporation which owns the Miramar Entertainment Park in Taipei, as well as a wide range of businesses including other hotels department stores, real estate and petrol stations. The developers were granted a building license which allowed them to build without an EIA (Environmental Impact Assessment); however, in order to sidestep the EIA, the construction could not exceed .9 hectares of land. With this license, the developers simply applied for an expansion permit the following year and then continued to build the resort six times the size of what the license permitted, with no EIA being conducted. This came to the attention of the Environmental Protection Administration (EPA) and they ruled that construction must be stopped until an EIA was approved. The Taitung County government then quickly pushed an EIA through, with five of the assessment members conveniently being Taitung County officials. In 2010 the High Court ruled that the EIA was flawed for this very reason along with the fact that the government had not provided sufficient scientific evidence that the project would not pollute the ocean. Then, in February of this year, the Supreme Administrative Court again ruled that the EIA was invalid and that construction “should” be stopped. The most recent verdict was just announced on September 21st, 2012, bringing news that the indigenous groups and the NGOs have won the latest injunction and the Supreme Administrative Court has ruled that construction must be discontinued.

Alas, as so many of us cynically predicted in September, construction goes on regardless. The one true sin in Taiwan is to stand between a developer and his profits; everything else is negotiable.

UPDATE: A friend points out that in the courts have no power to cite violators of injunctions for contempt and either toss them in jail or massively fine them, as US courts do._______________________[Taiwan] Don't miss the comments below! And check out my blog and its sidebars for events, links to previous posts and picture posts, and scores of links to other Taiwan blogs and forums! Delenda est, baby.

Online maps of Asia in the Library of Congress
****************************************
From: Richard J. Smith, Rice University

Happy Holidays!!

My "gift" for the period is to call attention to a vast, rich and surprisingly under-utilized scholarly resource: the online Map Collection(s) of the Library of Congress--the contents of which are all
fully downloadable. The basic LOC website is http://lcweb2.loc.gov/ammem/gmdhtml/setlhome.html

To find a general item, enter, say, “China Maps,” indicating a maximum of 400 bibliographic records. This will yield 336 entries, including maps of all kinds—some large, some small; some produced by Chinese, Japanese or Korean mapmakers, some produced by Western cartographers; some modern, some ancient (the earliest are dated 1136); some rough, some strikingly beautiful. There is literally something for everyone, including military historians, who, on the whole, have not made particularly good use of the enormously fruitful visual and textual possibilities provided by manuscript maps produced in any given period. Unfortunately, “military” is not a particularly productive search term--at least not for my area of the world (East Asia). “Garrison” is a bit better; see, for example, the strikingly beautiful map titled "Zhaotong fu yu tu." Some maps are mislabeled by the LOC, and so it takes a bit of trial and error to search for all the cartographic possibilities, but they are astonishing in their number and especially in their variety, from "world maps" to relatively small outposts. For a specific example of how one might search, again focusing on China, go to “Search All Map Collections,” enter a term like “China Coast,” then “match any words” and keep the default at 100 bibliographic records. This will eventually yield “Eastern Hemisphere,” designated “Map 11 of 100.” You can then click on on any of the several maps in the collection (all marked “880-01 Hai jiang yang jie xing shi quan tu”), and go to the bottom of the page where it says “Download JPEG2000 image.” Click on this link. The download may take a minute or so, since it will be a rather large file, but then you’ll have a magnificent image on your desktop, which you can roam around in and magnify to a remarkable extent. From this action you can isolate and “grab” the specific image you want. It’s a helluva lot of fun to poke around in this way, and I can guarantee that you will find some amazing stuff. Below, the titles of a few maps that I have downloaded recently, as a small indication of the possibilities for scholars of East Asia (these titles can all be entered directly into “Search All Map Collections,” sans the dates in brackets, which I have added):

Richard J. Smith
Rice University_______________________[Taiwan] Don't miss the comments below! And check out my blog and its sidebars for events, links to previous posts and picture posts, and scores of links to other Taiwan blogs and forums! Delenda est, baby.

Saturday, December 22, 2012

With wages rising across China and growing labor unrest threatening operations at mainland factories, Taiwan sees an opportunity to try to convince its “salmon to swim back home,” as local media have put it. Officials at Taiwan’s Industrial Development Bureau, which announced Catcher’s and Largan’s factory plans, said they didn’t know of any companies willing to discuss their participation in the program.

Hui-Ying Chen, deputy director of the IDB’s industrial policy division, said Taiwanese companies returning to invest often want to stay low-key, possibly to avoid accidentally offending clients or the local governments they work with. She said that since many of these companies continue to run factories in China, they likely want to avoid saying anything that might come off as negative toward the business environment there. Moreover, Taiwanese upstream suppliers tend to hold a strong belief that any publicity is bad publicity.

“When they call for information, they will leave their telephone number, but often they won’t even tell us what industry they are in,” she said. “Although they want to invest in Taiwan, many don’t want their names announced.”

As I've blogged on several times, one of the sweeteners is that firms that invest a certain amount in a "return" from China can hire more foreign laborers, a number which is already at a record figure. This tends to incentivize the worst kind of investments -- labor-intensive, low value added, heavily dependent on subsidized water and electricity (and effectively, labor), for their profit. The incentives also include zero tariffs on equipment imports, low-interest loans, and tech assistance. ....

Another good sign is the potential return of the smaller firms that were Taiwan's bread and butter. Plastics News observes that Taiwan's plastics firms are considering returning from China....

Two years ago, when Taiwan’s government started urging businesses to consider it, some executives didn’t take the suggestions seriously, said David Chang, vice general manager of Taiwanese press maker Multiplas Enginery Co. Ltd.

“At the time people considered it a joke,” Chang said. “Now people don’t think it’s a joke because of the wage increases [in mainland China].”

The head of the Taiwan Plastics Industry Association, which represents about 700 processing and moldmaking companies, predicted some work could come back, although he cautioned discussions are in their early stages.
Hsieh Sheng-Hai, secretary general of the Taipei-based group, said processors are closely studying it and want to see how key customers, including Taiwan’s large contract electronics manufacturers like Foxconn, handle the increased challenges of operating on the mainland.

He noted that even if work leaves the mainland, it may not come back to Taiwan – it could go to Indonesia, Vietnam or elsewhere in Southeast Asia. But it’s also true that Taiwanese companies see more problems operating in the mainland and are looking for solutions, industry officials said.

“They feel moving back to Taiwan would be much easier to do their business,” Hsieh said.

Some global plastics machinery companies at Taipei Plas, held Sept. 21 to Sept. 25, said they had seen significantly more sales of equipment to companies in Taiwan, and said “reshoring” from mainland China was a big driver.

Naomi Rovnick also reported on this for The Atlantic a few months back, also instancing the plastics industry. She pointed out that other factors are driving the shift of Taiwanese manufacturers out of China....

Sway Su, another attendee and a researcher for Taiwan's Plastics Industry Development Center, a trade association, echoes that view. "Manufacturing wages in some wealthier cities in mainland China are the same as in Taiwan now. So Taiwanese manufacturers want to move their production to Indonesia, Vietnam, Cambodia or Thailand and are looking at how to make that work." The minimum wage in Vietnam's capital, Hanoi, is 2 million dong ($95) a month. By contrast, in China's cheapest province for manufacturing, Jiangxi, in the nation's poor interior, monthly wages are around $137.

....

But there are other reasons to look farther afield. China began phasing out tax breaks for foreign investors back in 2008 and they are mostly gone. Vietnam, meanwhile, now offers a range of sweeteners. Wang, of JoyFly Technology, says he has just returned from a research trip to Vietnam, where he found that factory land in the south could be leased for 30% less than in China's Pearl River Delta, the export hub close to Hong Kong. "Of course, Vietnam's roads are nowhere near as good as China's and there are often power cuts," he admits.

A lack of credit is driving manufacturers out, or even bust. The Beijing government has been urging state-owned lenders to curb loan growth for some time. Misjudged infrastructure projects that Chinese provincial governments championed as part of Beijing's massive economic stimulus program of 2009-10 may contribute to a huge pile-up of bad loans, economists say, though the extent of the problem remains a matter for debate.

As a result, getting loans from Chinese banks has been a problem for many months, says Gerry Wang (no relation to George), general manager of a Taiwanese owned machinery manufacturing company named FCS based in Ningbo. Liguang's Adam Yin says that banks in Ningbo are lending to successful factories at annual interest rates of 7% to 8%, and claims that in early 2010, rates were more like 6% to 7%.

When the trickle becomes a stream, it will be time to sit up and notice. But most of the firms pulling out of China will be heading for elsewhere -- Mexico, Brazil, Indonesia, the last of which has been in the news lately as a potential investment site.
______________________Daily Links:

_______________________[Taiwan] Don't miss the comments below! And check out my blog and its sidebars for events, links to previous posts and picture posts, and scores of links to other Taiwan blogs and forums! Delenda est, baby.

Friday, December 21, 2012

Hope your apocalypse was as crystal clear as mine._______________________[Taiwan] Don't miss the comments below! And check out my blog and its sidebars for events, links to previous posts and picture posts, and scores of links to other Taiwan blogs and forums! Delenda est, baby.

Thursday, December 20, 2012

National Communications Commission (NCC) Chairman Howard Shyr (石世豪) yesterday said the commission’s ruling on Want Want China Times Group’s purchase of cable TV services owned by China Network Systems (CNS) remain unchanged and that the transaction would not take effect until the group fulfilled each and every requirement issued by the commission.

....

The preconditions include that group chairman Tsai Eng-meng (蔡衍明) and his family members, as well as his business associates in the deal, must completely dissociate themselves from the operation of CtiTV News. In addition, China Television’s (CTV) digital news channel must be turned into a non-news channel. As a TV network, CTV must have an independent editorial system as well.

These conditions were already rejected by WantWant back in July, months ago (my post). A media report quoted:

Chao Yu-pei (趙育培), special assistant to the chairman of Want Want China Broadband, yesterday said that the Want Want China Times Group could not accept the NCC’s conditions, saying that “The company will not sell CTI Television Inc. (中天電視台) or alter the operating status of China Television Co. (CTV, 中視).” He went on to stress that “The NCC does not have any legal authority to demand that we delink the Want Want China Times Group and CTI, or change CTV’s operating status."

The curious thing is that a couple of years ago the NCC, originally created during the Chen Administration to be a lapdog of the KMT in its ongoing struggle to gain control of the media and do an end-run around the Chen Administration's control of the government news organs, was in turn targeted by the Ma Administration (here) for being a bit too independent. The Administration obviously wants this deal to go through. Last year there a journalist who reported that the NCC had been pressured to pass the deal was sued, a case that caused an uproar. Either the NCC is simply grandstanding for the public and will be ignored by WantWant as it engulfs Next Media, to which the NCC will quietly acquiesce when presented with the usual fig leafs so it can claim the conditions were met, or else the Administration will slap it down.

The Taipei Times also reported...

President Ma Ying-jeou (馬英九) said on Tuesday during the release of the nation’s first human rights report in English that he did not want the media in the nation to present only one viewpoint.

....since so much of the local media is being eaten by China, one wonders.
_________________Daily Links:

_______________________[Taiwan] Don't miss the comments below! And check out my blog and its sidebars for events, links to previous posts and picture posts, and scores of links to other Taiwan blogs and forums! Delenda est, baby.

Taichung AmCham alerted me to this tale of gangsters raiding the local post office (here and here). Earlier this week at the Fengyuan Post Office here in the Kingdom of Chung, people started lining up as early as 3 AM according to media reports to purchase the Year of the Snake stamp sets. However, just as the Post Office was about to open to eager collectors, a group of 70 lads clad identically in black pushed their way to the head of the line and started threatening postal workers and intimidating innocent stamp collectors. Women with children were almost knocked down, according to our intrepid reporters, who managed to get wind of this event. Apparently last year's issue had rocketed from $1000 to $14,000 NT in just a year. Better than gambling and prostitution! Collectors said they didn't expect this year's stamps to do so well, however, so karma may have the last laugh. No word in the media whether our brave policemen had taken time out from their mah jong games to save the stamps and souls at the local post office._______________________[Taiwan] Don't miss the comments below! And check out my blog and its sidebars for events, links to previous posts and picture posts, and scores of links to other Taiwan blogs and forums! Delenda est, baby.

Wednesday, December 19, 2012

Stats of the Day, from the abstract to The Estimation of Aggregate Statistics for Taiwan-Invested Enterprises in China: 1988-2008

"Between 1988 and 2008, Taiwan-Invested enterprises (TIEs) contributed enormously to the economic development of China. However, the official statistics do not reflect the actual status of TIEs in China. Through literature compilation, statistical analysis and use of appropriate formula for estimation, the aggregate statistics of TIEs in China at the end of 2008 were estimated at: USD166.5billion Taiwanese direct investment in China; USD116.6 billion fixed asset investment of TIEs in China; USD1,965.3 billion cumulative international trade of TIEs in China; and 14.34 million people employed by TIEs in China."

From this journal._______________________[Taiwan] Don't miss the comments below! And check out my blog and its sidebars for events, links to previous posts and picture posts, and scores of links to other Taiwan blogs and forums! Delenda est, baby.

Taiwan and China have set aside differences over sovereignty since 2008, when the island’s conciliatory President Ma Ying-jeou took office. Mr. Ma’s government has signed 18 deals with China, drawing Taiwan closer to the world economic powerhouse. Talks on those agreements built mutual trust that didn’t exist before.

The island’s foreign ministry says that trust is now being questioned. The ministry’s news release calls China’s passport issue “a provocative act that will … damage the mutual trust laboriously built by the two sides in recent years.”

Taiwanese opposition forces are protesting the Chinese passports because they worry that the government is courting China rather than standing up to it, but analysts say officials in Taipei are just as irked as their skeptics.

“Our government thinks that China betrayed common ground, which is that there’s one China but subject to different interpretations,” says Nathan Liu, an associate international affairs professor at Ming Chuan University in Taiwan, citing the basis for talks and deals since 2008.

The "common ground" has always been a fantasy of the Ma Administration, or more correctly, a fantasy served up to outsiders to sell Ma's policy of slowly putting Taiwan into China's orbit via economic agreements (which have always been intended to lead to the "inevitable" political negotiations). China has not relaxed its campaign to annex Taiwan and suppress its international profile. We have no FTAs despite assurances that once ECFA was signed they'd be a cinch. China's campaign to acquire Taiwan's technology and hollow out its industries goes on. Etc. The real question is why there was ever "trust" in the first place.....

Of course, the popularity of the DPP's sticker campaign also shows how, once again, Beijing has made its ally Ma Ying-jeou look weak. How long will Ma keep the faith with the dream of Zion? It's hurting the KMT domestically at the moment....perhaps the claim that trust has been impaired is a form of damage control aimed at its domestic image: "we're going to take a tougher line from now on..."
______________Daily Links:

Another issue for Taiwan's family businesses, which sometimes surfaces in the media, is the ongoing problem of the succession: who will take over when the awesome, godlike, morally unique Founder goes to the great Manufactory in the Sky? WantWant

I've complained bitterly on this blog about the otherworldly nature of economic discussions that fail to take into account China's desire to annex Taiwan. Thanks for this, Taipei Times.

"The Suhua Highway has been closed at least 35 times between 2008 and this year, including 18 times this year alone, Hsiao said, adding that the closures have caused business losses of more than NT$1 billion (US$34.43 million) in eastern Taiwan this year." Taipei Times

Taiwan working on forming a laser industry cluster in the southern Taiwan science park. Such clusters are a key social and geographic feature of Taiwan's industries and an important source of their competitiveness.

_______________________[Taiwan] Don't miss the comments below! And check out my blog and its sidebars for events, links to previous posts and picture posts, and scores of links to other Taiwan blogs and forums! Delenda est, baby.

Running around the net...._______________________[Taiwan] Don't miss the comments below! And check out my blog and its sidebars for events, links to previous posts and picture posts, and scores of links to other Taiwan blogs and forums! Delenda est, baby.

Tourism ad. But great work._______________________[Taiwan] Don't miss the comments below! And check out my blog and its sidebars for events, links to previous posts and picture posts, and scores of links to other Taiwan blogs and forums! Delenda est, baby.

A while back I was sharing beers with a smart observer of Taiwan politics, and we were assessing both party's prospects for the 2016 presidential election. I thought Eric Chu might have a shot, but my friend pointed out that Chu isn't getting the kind of media exposure he needs. This week Chu was in the news talking to independence supporters and calling for a national affairs conference. These are the kinds of things Chu has to say if he wants to be the KMT's candidate in 2016.

Ma's close associate Su Chi says ECFA is basically a political agreement, calls for political talks. Preparing the ground? Obviously, the public in Taiwan will never accept annexation to China. Hence, the approach is to emphasize that annexation is already a reality, we just need to work out the details, and anyway, it is inevitable.

Another reminder that whatever you think of Chen Shui-bian, he is clearly a political prisoner. The high court this week vacated the judgment that Chen did not suborn perjury from his aides and sent it down for retrial. A few months ago it also sent back for retrial the finding, in the original trial and two appeals, that Chen was innocent of embezzling state affairs funds. They are never going to let him go -- he beat them twice in Presidential elections and once for Taipei Mayor.

Mosquito. Tokina 100mm macro. Got some nice pics today out walking the dog._______________________[Taiwan] Don't miss the comments below! And check out my blog and its sidebars for events, links to previous posts and picture posts, and scores of links to other Taiwan blogs and forums! Delenda est, baby.

Sunday, December 16, 2012

He wants to found a new political party to succeed an aging former President Lee Teng-hui as godfather of the Taiwan Independence Movement.

Mr. Graft had his son Chen Chih-chung, a first-term Kaohsiung municipal councilman summarily disqualified for involvement in his father's money laundering, broach the news that a new party will come into being at a time “favored by Heaven and benefited by Earth.” This is to be achieved by a unity of purpose among his “One Country on Each Side Alliance” faction of the DPP, and by rallying hard-core independence supporters, who are members of the Taiwan Solidarity Union (TSU), of which Lee is the spiritual leader.

Well, there won't be any such time any time soon.

There isn't any doubt that A-bian still commands allegiance of a couple of million supporters in Taiwan. Aside from eight members of parliament, his OCESA faction boasts 34 county and city councilors, but the majority of them are not very much interested in bolting from the DPP to join his new party, if it is founded before 2014. They have to run for re-election two years from now, and it's much better for them to stick with the biggest opposition party for much better odds to get re-elected. The parliamentarians? They don't have to worry about re-election for more than three years. The TSU? It's Lee's exclusive fan club, and there won't be many defectors.

Childishness like "Mr. Graft" aside, the China Post calls attention to the impossibility that a parole or pardon for Chen would "heal Taiwan" as (among others) longtime Taiwan supporter and former US diplomat Nat Bellocchi argued a while ago. A close reading of the Bellocchi piece shows that it contains no concrete, positive, Taiwan-centered arguments for Chen's release, nor are there any references to Chen's likely post-release behavior. It shows how weak the argument for pardon/parole is. Sadly, Ford's pardon of Nixon did not heal the US as Bellocchi argues, but rather, helped lay the ground for the current two-tiered criminal justice system in the US, as Glenn Greenwald points out so eloquently. Similarly, if Chen is pardoned or paroled, many Taiwanese aren't going to see that as a healing act. Instead, it will confirm their perceptions that a different law applies to powerful males who commit crimes.

The fact that both the China Post editorial and the Taipei Times' simultaneous refutation of the claim that Chen wants to start a new party make clear is that a parole for Chen will heal nothing in part because Chen's own personal characteristics make it impossible. He's shrewd, charismatic, energetic, likes to be the center of attention, likes to be in control and on top, and says whatever his audience wants to hear. In a politician these are all useful traits; in a would-be pardoned political prisoner and saintly healer they represent liabilities.

Were Chen ever to get out, he would go back to seeking the limelight, encouraging splits within the DPP in order to aggrandize his own faction and friends, and so on. Both the China Post and Taipei Times pieces essentially say the same thing even though they disagree. When Chen gets out he is going to re-enter pan-Green politics, sucking up time, effort, resources, and funds that could be going directly to the DPP and meaningful and important pro-Taiwan groups and causes. He'll be constantly pursued and goaded by the pro-Blue media for inflammatory quotes, further dividing rather than uniting.

In sum, the Free Chen! crowd doesn't appear to have considered the probable consequences of releasing Chen Shui-bian for Taiwan and for the DPP. They won't be benign. Especially at election time, when he is likely to congeal pan-Green support among key independent and Light Blue voters.

It's really, really, really time to stop wasting urgently needed outside and public resources like the attention of US Congressmen and international human rights groups, or space on the Taipei Times' editorial page, on Chen Shui-bian. Chen has made it crystal-clear that he is not going to show a reciprocal humility when he gets out of jail. Instead, he's going to burn the pan-Greens coming and going, draining resources to get him out of jail and then diverting them again once he is out. His family has money, and he still has many supporters in Taiwan. Let them work on getting him out of jail. Once again, I hope instead that Chen supporters overseas will use their valuable and limited resources to support more pressing and relevant causes, causes that meaningfully affect many lives here in Taiwan.

UPDATED: See this commentary in TT that explains how Chen can grow a new party. One of the KMT strategies for keeping the DPP out of power is funding third-party candidates to siphon votes from the DPP. Here is Chen planning to do that without any KMT help at all, using pan-Green resources._______________________[Taiwan] Don't miss the comments below! And check out my blog and its sidebars for events, links to previous posts and picture posts, and scores of links to other Taiwan blogs and forums! Delenda est, baby.

Saturday, December 15, 2012

The first point is that, whereas Taiwanese manufacturers did 12.24 percent of their manufacturing overseas in 1999, that figure grew to 46.23 percent by 2007, with 90.9 percent of offshore production done in China. By last year, the figure had climbed to 50.52 percent, with 92.7 percent of production abroad concentrated in China. After Taiwan’s first handover of government power from the Chinese Nationalist Party (KMT) to the Democratic Progressive Party (DPP) in 2000, the administration of then-DPP president Chen Shui-bian (陳水扁) abandoned his KMT predecessor, former president Lee Teng-hui’s (李登輝) “no haste, be patient” policy with regard to investment in China, allowing Taiwanese manufacturers to quickly move their operations across the Taiwan Strait. This relaxation of Taiwan’s cross-strait policies led to an exodus of manufacturers on a scale that no other country has ever seen.

It's so nice to see this. Remember how the Establishment media abroad and the pan-Blue media at home abused Chen Shui-bian for not "opening to China"??? It would be comical if it were a less urgent topic. Basically half of "Taiwan's" manufacturing is now done in China and the results are grim for the local populace. The number of working poor in Taiwan is high -- according to Huang, the DGBAS has 42% of the population making $30,000 NT or less, monthly.

Huang then goes on to point out that the moves kept Taiwan's makers "competitive". Profits shot up. But labor's share of GDP has fallen over the last decade from 50% to 44.5% of GDP. Last month I posted some charts from the US Bureau of Labor Statistics which showed, starkly, what has happened in Taiwan, especially since 2007. If you look at this chart you can plainly see that in the period 2000-07 Taiwanese workers experienced very slow wage growth and then, between 2007-10 experienced negative wage growth even though the very next chart shows that productivity growth has slowed slightly but continues to rise. This gap between falling wages and rising productivity, ironically makes Taiwan very "competive" which is neoliberal slang for a place where capital can make tons of money while the workers get screwed. For the last decade, but especially the last three years of the data, gains from rising productivity have gone to the firms, not to the workers.

Huang's next point is even more brutal:

The third point is that while Taiwanese manufacturers have spent more than a decade chasing cheap labor in China, they have paid scant attention to research, development and innovation. The overall value-added rate for the Taiwanese manufacturing industry as a whole slid from 26.3 percent in 2000 to 21.3 percent in 2010 — the biggest drop in Asia.

This is a point I've been making for several years on this blog -- Taiwanese firms moved to China so that they could continue to pursue Taiwanese-style family firm management and avoid having to upgrade to professionally run firms. But also, as they moved to China, they cut themselves off from the flow of government produced R&D innovation that Taiwanese SMEs have traditionally relied on (bike industry example). Several years ago on this blog I posted on a speech from Lee Teng-hui in which he predicts that this would happen -- even then it was obvious that moving to China had dumbed down Taiwan's firms. As Huang observes, the fall in value-added offsets the advantages of lower wages, harming "competitiveness."

Lots of other things involved -- weak unions, feeble taxes on the wealthy and on large corporations, poor regulation of wages and hours... the list goes on._______________________[Taiwan] Don't miss the comments below! And check out my blog and its sidebars for events, links to previous posts and picture posts, and scores of links to other Taiwan blogs and forums! Delenda est, baby.

From The Universal Gazetteer of 1807 by John Walker. The typhoon of 1782 actually became well-known in Europe and was widely held to have devastated the island, with some sources claiming it had wiped out the population._______________________[Taiwan] Don't miss the comments below! And check out my blog and its sidebars for events, links to previous posts and picture posts, and scores of links to other Taiwan blogs and forums! Delenda est, baby.

Thursday, December 13, 2012

I'm sure you've heard of Robinson Crusoe, Daniel Defoe's masterpiece, first published in 1719. But Defoe also published sequels to Robinson Crusoe, including the Further Adventures of Robinson Crusoe, in which the hero makes a stop at Formosa on his way to China....

++++++++++++

"We would have gone into the bay of Tonquin, for we wanted to inform ourselves of what was to be known concerning the Dutch ships that had been there; but we durst not stand in there, because we had seen several ships go in, as we supposed, but a little before; so we kept on NE. towards the island of Formosa, as much afraid of being seen by a Dutch or English merchant ship as a Dutch or English merchant ship in the Mediterranean is of an Algerine man-of-war.

When we were thus got to sea, we kept on NE., as if we would go to the Manillas or the Philippine Islands; and this we did that we might not fall into the way of any of the European ships; and then we steered north, till we came to the latitude of 22 degrees 30 seconds, by which means we made the island of Formosa directly, where we came to an anchor, in order to get water and fresh provisions, which the people there, who are very courteous in their manners, supplied us with willingly, and dealt very fairly and punctually with us in all their agreements and bargains. This is what we did not find among other people, and may be owing to the remains of Christianity which was once planted here by a Dutch missionary of Protestants, and it is a testimony of what I have often observed, viz. that the Christian religion always civilises the people, and reforms their manners, where it is received, whether it works saving effects upon them or no."

++++++++++++

According to the intertubes (here and here), the original edition of the sequel was published in 1719. This 1815 edition hosted on Google Books offers a bonus map and extensive footnotes on the island of Formosa._______________________[Taiwan] Don't miss the comments below! And check out my blog and its sidebars for events, links to previous posts and picture posts, and scores of links to other Taiwan blogs and forums! Delenda est, baby.

Wednesday, December 12, 2012

"Of Taiwan's 460,000 acres of farmland, more than 30,000 acres have been fallow for five years; 46,000 acres have been fallow for two years; 50,000 acres have been fallow for a year," said Chen.

The current system offers stipends to encourage land to go fallow. It was implemented when Taiwan was preparing to join the WTO in 2002. The country wanted to cut its own grain production at the time to allow an influx of imported staple foods.

In other words, the US demanded that Taiwan curtail its own rice production to permit imports of rice from the US. The results were of course pernicious, as I observed a couple of years ago:

In Taiwan the government runs a set-aside program for farmland under which large quantities of farmland lie fallow. In some years the amount set aside exceeds the amount planted in rice (!). This program has come under much criticism, since sometimes farmland becomes unusable after being set aside and land lying uncared for invites pests that affect nearby farms. This results in abandoned land, 50,000 hectares by one 2004 estimate. When land leaves the market, it drives up the price of remaining land, pushing up rents -- and many farmers are renters, not owners. Further, for many observers it makes little sense to set aside good farmland in the lowlands while permitting farming on slopes. The set aside program is also driven by shortages of water, diverted for industrial and residential needs. Everything is exacerbated by the lack of government oversight and monitoring, a persistent problem in all areas of government policy in Taiwan.

Another long-term process, still being felt, is the change in demand for rice as Taiwan's food desires changed. As demand for meat grew in the 1970s and stimulated local livestock production, this drove demand for feed crops for the animals, which in turn pushed farmers to switch from rice to feed crops for animals. This reduced the land in rice, especially since the government set a price floor for feed crops in the 1970s. Accession to the WTO slammed rice production further.This journal article has the call:

To prepare for joining the WTO in 2002, the Taiwanese government implemented a new plan in 1997, the “Adjustment of Paddy Field and Uplands Utilization Program,” to cushion the adverse effects of agricultural trade liberalization on domestic farmers. According to the negotiated schedule for opening the rice market, Taiwan was required to import a specified amount of brown rice annually, roughly 8% of annual domestic rice consumption, before the rice market was completely opened. The additional supplies of rice from imports (about 144,000 tons of brown rice) represent a need to reduce further rice production, which will be met by letting an additional 40,000 ha of paddy fields go fallow (Shi, 2002). Thus, the goal of rice production in Taiwan has changed from self-sufficiency to a demand–supply balance (Lee et al., 1997).

Additionally, as a developed economy, Taiwan was required to reduce its AMS [ag subsidies] by 20%. To achieve this goal, the Taiwanese government reduced the land growing forage crops at a guaranteed price, and further encouraged diversion to different plants and fallow lands. The area planted with feed maize decreased accordingly and fell to the level it was in the late 1960s.

Finally a 2007 a revision to the village rebuilding law permitted the further conversion of 160,000 ha of farmland for the construction of "idyllic communities."

A FocusTaiwan piece offers a few pertinent observations from Agricultural Minister Chen on what is driving the new law:

Chen said the total acreage of local rice paddies has decreased from some 600,000 hectares 30 years ago to about 250,000 hectares at present.

In contrast, the acreage of fallow farmland has increased steadily since Taiwan's accession to the World Trade Organization in 2002 and has exceeded 200,000 hectares by now.

Which large plots of farmland are left idle, their owners can still receive subsidies. "The phenomenon violates the principle of fairness and justice," Chen said, adding that the Council of Agriculture (COA) needs to take actions to improve the situation.

The piece then offered a translation of a UDN article on the new policy giving details:

At present, farmland owners are entitled to receive NT$90,000 (US$3,072) per hectare in two installments annually if their farmland is left fallow.

Under the COA's new fallow farmland revitalization project, land owners can only receive NT$45,000 in subsidy annually for fallow farmland.

The restriction is aimed at encouraging landlords to plant crops for at least some months instead of leaving their land plots fallow all year long.

If landlords are unable to plow their farmland, the COA-backed farmland bank will help mediate leasing deals for them during a grace period from 2013 to 2014.

During this period, landlords will be given an additional NT$20,000 in farmland maintenance subsidy.

Owners of land plots that are unsuitable for farm produce plantation or are reserved for ecological conservation will be offered NT$68,000 in subsidy in two installments annually. The COA will also help landlords to transform their land plots for other usage.

Chen said the new project will need a annual budget of NT$11 billion, the same amount needed for the current project.

Under the new laws, the government promotes production while reducing fallow land without a change in budget. This is ok if you are a young farmer, but older farmers who leased land long-term and invested in new equipment to farm it expecting X amount of subsidy, as the UDN piece goes on to point out, will now be getting 1/2X. Ths policy might encourage land sales by debt-stressed farmers to developers, which unfortunately Taiwan has no shortage of.

Lawmakers criticized the new policy (TT) which places control of production in the hands of local governments (read: patronage networks and local clan and faction systems):

However, the council is failing to control production and supply under its current policy, which leaves 60 percent of activated fallow land for local governments to decide which crops to grow and does not regulate the plantation of import substitution crops, such as flint corns, sugarcanes, soybeans and wheat, the lawmaker said.

The council’s planning and seasonal adjustments would be crucial for the farmers, otherwise the farmers could be exploited by middlemen or farmers in various regions could cultivate the same crops, which would result in lower prices, he added.

DPP Legislator Huang Wei-cher (黃偉哲) said the central government would be in a better position to monitor and control production and supply than local governments.

The new policy also encourages farmers to plant corn and wheat, two crops not particularly suited for northern Taiwan. The policy -- of course not, why even say it? -- also appears to contain no promotion of sustainable, organic, or permaculture farming. Hope I am wrong....

The Committee to Protect Journalists has a blog post up on the Next Media buyout:

A media buyout in Taiwan which would put independent news outlets critical of China into the hands of a pro-Beijing media tycoon is cause for concern for the island's press. Jimmy Lai, the outspoken mogul behind Hong Kong-based Next Media and the Apple Daily tabloid, is selling his unprofitable Taiwan holdings to a consortium including Tsai Eng-meng, whose China Times Media group is supportive of China, according to local and international news reports.

...showing how publicity about the effects of the buyout on the media atmosphere in Taiwan is reaching globally. Kudos to everyone who has worked to publicize this sad affair.

The Taipei Times noted, however, that there has been too great a focus on the Next Media buyout and other media issues are going AWOL. To wit: excellent TT editorial on the Administration's moves to constrain reporting by placing it under government regulation....

A second worrying incident occurred on Monday, when the legislature passed an initial screening of a draft amendment to the Communicable Disease Control Act (傳染病防治法) that would force media organizations to correct any “false” information they publish on disease prevention measures during an epidemic. While this makes sense on paper, the proposed amendment raises the specter of the government — perhaps in collusion with pharmaceutical companies — having final say on what constitutes “true” or “false.”

The 'first incident' referred to the editorial was this survey published by the Taipei City government.
_______________Daily Links:

Satin Cesena on urban bike culture. Taiwan is almost ideal for this climate-wise, but the infrastructure and enforcement here are abysmal.

_______________________[Taiwan] Don't miss the comments below! And check out my blog and its sidebars for events, links to previous posts and picture posts, and scores of links to other Taiwan blogs and forums! Delenda est, baby.

_______________________[Taiwan] Don't miss the comments below! And check out my blog and its sidebars for events, links to previous posts and picture posts, and scores of links to other Taiwan blogs and forums! Delenda est, baby.

Photos on this blog are hosted by Flickr. I used to enthusiastically recommend Flickr but the new site changes have grievously impaired its usefulness. My current recommendation: find another photo host. My photos at Flickr. Just click on any photo to be taken to its Flickr page to view it in larger size.